RAJNIKANT SURAJRAM BACHKANIWALA, VESU V. ACIIT (OSD), WARD-2(1)(3), SURAT

ITA 88/SRT/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1767 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-06-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 17-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Value adopted by valuation officer; Fair market value; Valuation report
• Section: 54F; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 88/SRT/2020 (AY: 2012-13) (Virtual Court hearing) Rajnikant Surajram Bachkaniwla, Plot No.12/A, Sai Enclave, U.M. Road, Narmad University Road, Vesu, Surat-395007. PAN : ABJPM9268Q Vs. The ACIT (OSD), Ward-2(1)(3), Surat. (APPELLANT) (RESPONDEDNT) Appellant by Shri Umesh Dalal, CA Respondent by Shri J. K. Chandnanai, Sr. DR Date of hearing 22/06/2022 Date of pronouncement 17/08/2022 O R D E R PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax, Appeals-2 [in short “the CIT(A)-2”], Surat, dated 05.02.2020 for Assessment Year (AY) 2015-16, which in turn arises out of an assessment order passed by Assessing Officer under section143(3) of the Income Tax Act, 1961 (in short ‘Act’). The assessee has raised the following grounds:- “A. Registered value report not accepted (Section 55A) 1. On the facts and in the circumstances of the case, the learned CIT(A’s) erred in not considering registered valuer report. 2. On the facts and circumstances of the case, the learned CIT(A’s) erred in not appreciating that registered valuer has made comparable instances before making valuation as on 01.04.1981. 88/SRT/2020/AY.2015-16/Rajnikant Surajram Bachkaniwala 2 B. Accepting DVO Report without giving any justification 1. On the facts and in the circumstances of the case, the learned CIT(A’s) has erred in excepting DVO report for making value of Rs.53/- without assigning any reason for not accepting registered valuer report. 2. On the facts and circumstances of the case, the learned CIT(A’s) erred in not considering the written submission made from time to time.” 2. Brief facts of the case are that assessee is an individual filed his return of income for assessment year (A.Y.) 2015-16 on 18.03.2016 declaring income of Rs.8,21,740/-. In the computation of income, the assessee has also shown in the agricultural income of Rs.11,36,565/-. The case of assessee was selected for scrutiny. During the assessment, the Assessing Officer recorded that assessee has claimed long term capital gain of Rs.19,24,180/- on sale of immovable property during the year. The Assessing Officer on perusal of ITS details and the submission of assessee noted that assessee has sold immovable asset (property) of Rs.3.54 crore, having 1/2 nd share (50%), thus share of assessee is of Rs. 1.797 crore. The assessee has shown fair market value as on 01.04.1981 at Rs.4,12,314/- (50% is Rs.2,06,157/-). The assessee furnished the valuation report as per fair market value as on 01.04.1981 at Rs.7,19,153/- (1/2 nd is Rs.3,59,576/-). The Assessing Officer obtained the report of Department Valuation Officer (in short ‘DVO’) who valued the property at Rs.85,350/- as on 01.04.1981 (i.e. @ Rs. 89 per square meter) for total area of 958.87 per sq. meter. As per fair market value assessed by DVO, the assessee’s share comes to Rs.42,670/- on which the 88/SRT/2020/AY.2015-16/Rajnikant Surajram Bachkaniwala 3 Assessing Officer worked out long term capital gain of Rs.35,987/-. The Assessing Officer issued show cause notice as to why the evidence of long term capital gain of Rs.16,74,107/- (Rs.35,98,287 – Rs.19,24,180) should not be added to the income of assessee. The assesse filed his reply vide reply dated 22.12.2017. The contents of reply filed by assessee is recorded in para-6 of the assessment order. The assessee in his reply submitted that the assessee has furnished the valuation of property through Registered Valuer and valued the property @ Rs.750/- per square meter by citing twelve sale instances of 1978 to 1984. The departmental valuer had proposed value @ Rs. 76/- per square meter as on 01.04.1981. The assessee objected about the valuation report of the Department Valuation Officer. The assessee submitted that assessee has declared long term capital gain of Rs.19,24,180/- on sale of property. This amount was adjusted against loss of sale of security of Rs.77,95,600/-. The value of property as on 01.04.1981 was taken at Rs.2,06,157/-. The indexed value was arrived at Rs.21,11,048/-. The assessee obtained valuer report from Registered Valuer and valued the property at Rs.7,19,153/-. The assessee’s share is Rs.3,59,576/- and indexed value becomes to Rs.36,85,058/-. Thereafter, the Assessing Officer was asked to substitute to the indexed value to Rs.36,82,058/- in place of Rs. 21,11,048/- at claimed deduction under section 54F at Rs.1,39,43,574/-. The assessee also stated that objection filed before Assistant Valuation Officer was not properly considered which 88/SRT/2020/AY.2015-16/Rajnikant Surajram Bachkaniwala 4 resulted in adopting the very low figure. The sale instances cited the Government Valuation Officer was not considered by Assistant Valuation Officer. The Registered Valuer has given twelve sale instances and the valuation ranges from Rs. 467/- to Rs. 2400/- per square meter approximately. Thus, the Registered Valuer correctly valued the property @ 750/- per square meter. The location of property of assessee is at Parle Point which is in the heart of city. The area was developed and proper consideration is to be made for adopting the value. The valuer attached the copy of sale instances in respect of property located at Umra and Majura Gate and submitted that their properties located at Umra. The location of Majura Gate also adjacent to Umra. The assessee also objected that no objection was raised by Assistant Valuation Officer in respect of various sale instances given by assessee. The assessee also stated that the land was non-agricultural land, however the Assistant Valuation Officer assumed it to be agricultural land which have made an impact on the valuation as on 01.04.1981. 3. The reply of assessee was not accepted by Assessing Officer. The Assessing Officer held that the objection raised by the assessee was considered by AVO after considering the evidences produced by the assessee. The Assessing Officer computed long term capital gain at Rs.2,03,008/- on the basis of report of AVO and added to the income of assessee. 88/SRT/2020/AY.2015-16/Rajnikant Surajram Bachkaniwala 5 4. On appeal before ld. CIT(A), the assessee filed similar submission as made before the Assessing Officer. The ld. CIT(A) confirmed the action of the Assessing Officer by holding that order of Assessing Officer is well reasoned order. Further aggrieved, the assessee was filed present appeal before us. 5. We have heard the submission of Learned Authorized Representative (Ld. AR) of the assessee and the Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue and have gone through the order of lower authorities. The Ld. AR of the assessee submits that he has very limited plea in the present appeal about the value of immovable property as on 01.041981 for the working on capital gain. The Ld. AR of the assessee submits that property of assessee is situated at Parle Point which is in the heart of city of Surat. The Parle Point was well-developed area in 1981. The assessee along with his co-owner sold a plot admeasuring of 958.87 square meter. The assessee is having 1/2 share in the said plot. The assessee obtained the report of Government Registered Valuer who valued the property @ Rs. 750/-. However, the Assessing Officer referred to matter to departmental valuation officer, valued the property @ Rs. 89/- per square meter. As per Registered Valuer Report, the indexed cost comes to Rs.36,82,058/-, however as per Department Valuation Officer’s Report, the indexed cost of assessee’s share comes to Rs.4,36,941/-. The assessee is basically aggrieved by the valuation before Department Valuation Officer who valued the property @ Rs.89 88/SRT/2020/AY.2015-16/Rajnikant Surajram Bachkaniwala 6 per square meter. The Ld. AR of the assessee submitted that report of Assistant Valuation Officer is filed at page no.24 of the paper book. The Assistant Valuation Officer based his report mainly on agricultural plot but failed to consider that this plot of land of assessee is non-agricultural land and the agricultural land cannot be compared unless non-agricultural rates are available. There is vast different between the agricultural value and non-agricultural value. The Department Valuation Officer has taken a rate of Rs.89 per square meter which is applicable for agricultural land. The comparable instances referred by Assistant Valuation Officer is mainly of agricultural land. The plot under consideration is on the main route at Parle Point. The plot is in the vicinity of commercial area. On the other hand, the comparable instances given by Registered Valuer in his report, ranging from Rs.467/- to Rs.2344/- per square meter. The value of Rs.467/- and Rs.2344/- of non-agricultural land is not applicable. The Registered Valuer has attached copy of indexed the value of comparable sales instances in his report. In first two instances, the plots are located at Umra, which is nearby to the plot of assessee. The Assistant Valuation Officer has not attached any such instances which suggested that he adopted rate at Rs.89/- without any basis. The Ld. AR of the assessee while carrying through report of Departmental Valuation Officer by showing valuation sale instances of Revenue Survey No.52, 63 and 105 of Umra ranging between 467, 2344 and 897 per sq. meter having area of 88, 90 and 427 per square 88/SRT/2020/AY.2015-16/Rajnikant Surajram Bachkaniwala 7 meter respectively would submit that estimation by Registered Valuer at Rs.750/- per square meter is quite reasonable and justified 6. On the other hand, the ld. Sr. DR of the Revenue supported the order of lower authorities. The Ld. Sr. DR for the Revenue submitted that the assessee was given opportunity by Assistant Valuation Officer before giving his final report in assuming the fair market value as on 01.041981. Further, the Assessing Officer before passing the assessment order has considered of the objection of the assessee. The Ld. CIT(A) confirmed the order of Assessing Officer being reasonable and justifiable. The Ld. Sr DR for the revenue submits that the assessee is not entitled for any relief. 7. We have considered the rival submissions of both the parties and have gone through the order of lower authorities. We find that during the assessment order, the Assessing Officer made reference to the valuation officer for determination of fair market value as on 01.04.1981. The Assistant Valuation Officer adopted the valuer asset- based as on 01.04.1981 @ Rs.89/- per square meter. We find that before Assistant Valuation Officer, the assessee filed detailed objection. The objection of assesse was not discussed by AVO in his report. We further find that before Assessing Officer, the assessee again filed detailed written submission to substantiate the report of Government Registered Valuer. The Assessing Officer instead of given any finding on various objection raised by assessee has accepted the rate suggested by Assistant Valuation Officer. We have perused the 88/SRT/2020/AY.2015-16/Rajnikant Surajram Bachkaniwala 8 report of Valuation Officer filed on record on page nos. 17 to 37 of the paper book. We find that the assessee has given instances of several properties as recorded on page nos. 22 to 24 in his report. However, the Assistant Valuation Officer rejected all the objections raised by the assessee and suggested the value of land as on 01.04.1981 @ Rs. 89/ per square meter. 8. We have independently examined the report of Registered Valuer as well as report of Assistant Registered Valuer. There is no dispute that property of assessee is situated near Parle Point, Surat which is admittedly a developed commercial area. The Registered Valuer has given several instances along with the date of purchase, wherein in Revenue Survey Nos. 52 and 105, the Registered Valuer has shown sale instances on the basis of registered documents as on 01.12.1978 and 16.10.1989 at Rs.667/- and Rs.897/-. However, in respect of plot admeasuring 90 per square meter in Revenue Survey No. 63/P1 sold on registered with registration no. 8744, the valuer has shown the rate of Rs.2344/ per square meter. However, the registered valuer has suggested Rs.750/- per square meter. Considering the location of the property, we find that the rate adopted by Registered Valuer based on the registered sale deeds with sub-registered office is fair and reasonable. Therefore, we direct the Assessing Officer to accept the rate of land as on 01.04.1981 @ Rs. 750 and compute the long term capital gain/loss accordingly. In the result, the grounds of appeal raised by the assessee are allowed. 88/SRT/2020/AY.2015-16/Rajnikant Surajram Bachkaniwala 9 9. In the result, the appeal of the assessee is allowed. Order pronounced on 17/08/2022, in open court and the result was also placed on the notice board. Sd/- Sd/- DR. A. L. SAINI PAWAN SINGH (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) Surat, Dated: 17/08/2022 SAMANTA Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR /True copy/ By order // True Copy // Sr.PS/PS ITAT, Surat